Partial Truths in Bibiland

Next time Netanyahu stands before the blackboard with a felt pen in his hand, and with great confidence draws the future, it would be a very good idea to have a small child (or a courageous economist) around to cry out that even if the king is not entirely naked, his handling of the facts requires watching every word that comes out of his mouth like a hawk.

The sight of the finance minister writing the economic data of the last year up on the board is likely to stir awe and exaltation in the heart of the observer. Look, our finance minister is explaining to us what is right and what is not, sharing his considerations with us, displaying for us the future outline of our economy.

Only after the cloud of self-satisfaction disperses does the average citizen remember our finance minister's glorious political history - and decide that it might be a good idea to examine some of the data more closely.

For example, Finance Minister Benjamin "Bibi" Netanyahu repeatedly asserts that the income tax in Israel is among the highest in the Western world. Not true. The figures show that Israel is in a good place at the bottom of the list: Of 21 Western states, about 15 impose higher taxes on income than Israel.

It is not enough that in recent years the taxation system's role in narrowing gaps has been shrinking; the finance minister is also trying to convince us that these changes have in fact been beneficial to the weak. He does this by using partial truths and pieces of facts. For example: Netanyahu boasts that during the past year the share of the two upper deciles in tax payments increased by more than 2 percent, whereas the share of the eight lower deciles declined by 1 percent.

The thrilled reader concludes that the reason for this is because the tax burden on the wealthy has been increased. But then he remembers that he is in Bibiland, where increasing taxes for the wealthy is a no-no. So what is the meaning of these data that the Finance Ministry is spreading? Simple. The change in the collection of taxes derives from the fact that the rich have grown richer and the middle classes have grown weaker and many of them have dropped below the tax threshold. The datum of which Netanyahu boasts reinforces the argument concerning the large gaps in the Israeli economy and does not refute it.

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Netanyahu is telling the public that the public expenditure on welfare in Israel is high relative to the expenditure in the countries that are members of the Organization for Economic Co-operation and Development (OECD). However, according to the National Insurance Institute Report, the public expenditure for welfare in Israel is among the lowest relative to the OECD countries - about 24 countries spend more than Israel, and only five spend less. This is why one-third of the elderly people in Israel suffer from economic distress and more than 600,000 children live below the poverty line.

Netanyahu is claiming that it is necessary to cut transfer payments and spur people to go to work, and is acting to weaken the national insurance. Has the NII, as he says, indeed become a paradise for parasites and a city of refuge for idlers? From a document distributed to members of the Knesset Finance Committee it emerges that most of the NII payments are to populations that are unable to integrate into the job market.

With respect to the employment figures, Netanyahu is also telling no more than a quarter of the truth. Indeed, the unemployment rates have gone down but the poverty among the employed has increased. Most of the jobs that have been added are part-time jobs that do not support the workers.

According to the finance minister, the solution to all the problems is lowering taxes, cheapening labor and increasing the flexibility in the job market, and the main foe is national planning and government intervention in the economy. Does this sound convincing? Perhaps, but not necessarily correct.

A Bank of Israel report determines that flexibility in the job market serves the employers but damages the workers' employment safety net. And what are the bank's economists proposing? "There is scope for corrective government intervention that places emphasis on the weakest groups of workers," they note.

The Finance Ministry says with a sigh that it does not have the resources to give every needy family a holiday grant of more than NIS 11. However, the government's activity during the first quarter of this year created a huge surplus of billions of shekels. The holiday grant could have been several times more generous.

In other words, the Israeli public has to know that the finance minister is not presenting it with the facts but is rather harnessing partial facts to his needs. Therefore, next time Netanyahu stands before the blackboard with a felt pen in his hand, and with great confidence draws the future, it would be a very good idea to have a small child (or a courageous economist) around to cry out that even if the king is not entirely naked, his handling of the facts requires watching every word that comes out of his mouth like a hawk.

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